* Sees prefeasibility at Ollachea by mid-year
* Sees production by 2014
By Pav Jordan
TORONTO, March 7 (Reuters) - Minera IRL (IRL.LM), a gold miner focused on properties in Peru, Chile and Argentina, says it could have a resource of more than 2 million ounces of gold at its flagship Ollachea property.
Speaking on the sidelines of the annual Prospectors and Developers conference in Toronto, Minera IRL Chief Executive Courtney Chamberlain said the company plans to have a prefeasibility study ready for the project by mid-year, with production by the second half of 2014.
It acquired the property from global mining giant Rio Tinto (RIO.L) and production should ramp up as its existing mine, the Corihuarmi gold mine in Peru, stops operating by 2015.
“We’re now saying that we can see a 2 million-plus resource there, which is psychologically another hurdle,” Chamberlain told Reuters. “People will start taking notice.” <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For more stories on PDAC convention: [ID:nN02153893] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Chamberlain is in Toronto to sell the story further. He plans to make Minera IRL a C$500 million company, more than double its current market capitalization is C$189 million.
Trading volumes in the company’s stock has risen steadily since the fourth quarter last year and shares are close to a 52-week high of C$1.60 a share. In mid-February the stock was around C$1.30 a share.
Chamberlain was one of some 22,000 global mining players at the Toronto PDAC conference, the largest of its kind in the world and which comes this year as metals prices soar and gold prices flirt with record highs.
Minera IRL is listed in Lima, Toronto and London.
Its Corihuarmi mine will produce 30,000 ounces of gold in 2011, generating about $40 million in revenue, based on today’s near-record gold prices around $1,400 per ounce.
Chamberlain says the company has $30 million in the bank, and a $20 million line of credit with Macquarie bank, so there is no need for more financing at the moment. The company has an annual burn rate of about $60 million a year.
“It would give us a lot of satisfaction to build a mid-tier mining company and I think we’ll unlock a lot of shareholder value,” he said.
Minera plans to bring Ollachea and its Argentina property, Don Nicolas, into production before Corihuarmi cash flow dries up and says it will create a company with gold output of some 180,000 to 200,000 ounces a year.
“That isn’t mid-tier yet, but it’ll give us sales of $200 million or $300 million a year, and a margin that we can really plow back into the company or think about a dividend policy,” said Chamberlain. (Reporting by Pav Jordan; editing by Janet Guttsman)